2. L’Oréal
France
www.loreal.com
Beauty Sales:: $24.7 billion

Key Personnel: Sir Lindsay Owen-Jones, chairman; Jean-Paul Agon, chief executive officer; Marc Menesguen, president luxury products; Jean-Jacques Lebel, president consumer products division; Laurent Attal, president and chief executive officer L’Oréal USA.

Products/Brands: Hair care, skin care, sun care, color cosmetics, toiletries and fragrances sold under 25 international brand names, including L’Oréal Paris, Garnier, Maybelline New York, Pureology, Lancôme, Biotherm, Helena Rubinstein, Kiehl’s, Shu Uemura, Ralph Lauren Fragrances, Diesel, Victor & Rolf, La Roche-Posay. L’Oréal’s holdings also include The Body Shop.

The Yves Saint Laurent Rouge Volupté, shown here in Provocative Pink, boasts a built-in mirror.

New Products:  L’Oréal Professionnel Color Supreme, Derma Genesis/Skin Genesis, Lancôme Rénergie Morpholift Rare line, La Roche-Posay Substiane anti-aging replenishing care, Maybelline Define-A-Lash.

Comments: Sir Lindsay Owen-Jones, chairman of L’Oréal, noted in the company’s 2007 annual report that “the globalization of cosmetics consumption is only just beginning.” No company understands that better than L’Oréal, for while U.S. sales grew by 4.8% like-for-like, global and emerging markets were key to the company’s profitability in 2007. Led by CEO Jean-Paul Agon, L’Oréal reported double-digit growth for the 23rd consecutive year, with sales of $24.7 billion (which would actually put L’Oréal in first place ahead of P&G, if not for P&G’s addition of personal grooming into its beauty segment).   
  
L’Oréal strengthened its position in all markets, and reported that for the 15th consecutive year, the growth of its business in the world’s cosmetic market was once again above average at 5%. For the first time, “the newer countries” (in areas such as Asia, Latin America and Eastern Europe), which L’Oréal calls the “rest of the world” zone, comprised the largest market. “This is a turning point in the history of L’Oréal,” said L’Oréal’s Agon. “Over the coming years, this zone will make a major contribution to the increase in the group’s profitability.” All in all, L’Oréal’s share of the world market increased to 15.3% with significant gains on all continents.
  
By percentage, consumer products led with 52%, followed by luxury products (24.7%), professional products (15%) and active cosmetics (7.8%). By business segment, skin care captured over a quarter of sales with 26.2%, followed by hair care (23.8%), makeup (20.4%), hair color (15.7%), perfumes (10.8%) and other (3.2%). Overall, Western Europe still held a commanding share with 45.6%, with “the rest of the world” edging out North America 29.2% over 25.2%.
  
Looking at the first half of 2008, L’Oréal’s sales registered $13.6 billion, an increase of 5.3% like-for-like. Luxury brands are proving to be a driving force behind sales.
  
Sales in the Luxury Products division grew 4.9% like-for-like over the same period last year. In skin care, Lancôme’s anti-aging products (in particular the Rénergie line and the launch of Primordiale Cell Defense) were major contributors. The men’s skin care segment also proved healthy, due to the launch of Skin Minerals for Men by Giorgio Armani, and the success of the Biotherm Homme and Kiehl’s skin care lines. In makeup, the new Photogenic Lumessence foundation from Lancôme was a standout. In fragrances, the success stories of Emporio Armani Diamonds and Diesel Fuel for Life continue. The division has undertaken major worldwide launches for Magnifique by Lancôme and Notorious by Ralph Lauren.
   
The Professional Products division, which is expanding into salons and winning market share around the globe, achieved like-for-like growth of 3.8%. Chroma Riche by Kérastase and Shu Uemura Art of Hair, were both increasingly successful.
  
The Consumer Products division reported a like-for-like increase of 5.7%. Skin care continued to show growth and significant gains in market share thanks to L’Oréal Paris’ Skin Genesis, Maybelline New York’s Mineral Power foundation and Define-A-Lash mascara. In hair care, Garnier Fructis Blond Care and Re-Nutrition by L’Oréal Paris led the segment.
  
Also in June, the French cosmetics giant announced the completion of the purchase of YSL Beauté and its subsidiary Roger and Gallet for a reported $1.68 billion. Under the agreement, L’Oréal also gained licenses to the Stella McCartney, Oscar de la Renta and Ermenegildo Zegna fragrance and cosmetics lines.
  
Looking ahead, Agon said, “With a very intensive launch program in the second half, we are optimistic about our ability to improve our growth by the end of the year.”